Mr. Lynch had proposed a plan to save the Nook unit, which was facing tumbling sales and disappointing results. He revealed a three-part strategy, the third part considered by the Street the most dramatic: Getting out of actually building the color Nook.

“The company is moving away from independently building our own tablets and intends to partner on future tablet programs with partners to design co-branded tablets with NOOK content,” Mr. Lynch said. “Leveraging and scale manufacturing partner in tablets offloads risks associated with building the products ourselves and will allow us to keep pace with innovations in the rapidly changing tablet market.”

He specified that he didn’t know how the partnerships would work, but did say “we have a lot of interested parties that we’re in discussions with.”

Fast forward to today. Mr. Lynchleft the company last month and Mr. Riggio is no longer looking to separate the retail stores. Michael Huseby, the president of Barnes & Noble and the boss of the Nook business, told analysts and investors Tuesday the world had misinterpreted the comments from Mr. Lynch.

The company has no intentions of outsourcing production on the color Nook and it is looking to integrate the Nook and retail businesses.

“I want to acknowledge that in June, there was a pretty strong message sent to the market that we were shifting towards a more of a partnership model on the production of color devices,” Mr. Huseby said. “Some kind of wholesale outsourcing of our color device business is neither … appropriate nor is it smart for the company.”

Wall Street certainly thought there was outsourcing being done. At one point on the earlier call, a Goldman Sachs analyst used the phrase “outsourcing.” Mr. Lynch didn’t move to correct him.

In a note published last week, Janney analysts said they expected spending to decline as Barnes & Noble “attempts to outsource manufacturing,” a move it said was “in the right direction to regain profitability and be able to compete more effectively in the e-reader market.” Barclays analysts have also used the word “outsource,” saying it was “encouraged” about the idea though cautious because no partner had been disclosed.

Mr. Huseby instead painted the plan as an attempt to tap technology firms to help with underlying parts like chips and displays and thereby reduce costs.

While Mr. Lynch had said “it was very capital-intensive to build our own tablets,” Mr. Huseby dismissed talk of it being expensive and said the problem with the Nook business was in management’s forecasting, a bit of a shot at Mr. Lynch.

“And one thing I would say and I want to say this is that, the problem is not the devices, the devices that our hardware and software and other members of our NOOK team have produced over the last four years are great,” Mr. Huseby said. “The problem was the decisions that were made by management quite frankly in terms of demand forecast based on what was thought to be good information.”

On the one hand, he said Mr. Riggio is supportive of a plan “for a more integrated business” and said the “focus going forward will be on providing customers with a more integrated Barnes & Noble and NOOK experience.”

“If we want to be in the content business, we need to be in the device business no matter how they’re produced,” Mr. Huseby said after questions from investors who sounded flummoxed by the changes.

But, Mr. Huseby left wide open the possibility of another solution than having to go through with that plan, saying the company would still entertain any offers or suggestions that happen to come in.

”Timing is everything, and the performance of the business has an impact on the timing of when you separate a business,” Mr. Huseby said. “Nobody is given up on realizing … that these are separate businesses.”